Getting your first car is undoubtedly an exciting event. That also means you'll get an auto insurance policy for the first time. Misinformation and common myths may lead to disappointments when getting your automobile policy. Here are, however, some basic facts that you should know about an auto insurance policy.
1. The State Auto Insurance Minimum Isn't Enough
State minimum requirements for an auto insurance policy are just enough to allow you to drive in that state. However, in the event of an accident, you will quickly realize that this coverage is not anywhere near sufficient.
Repair costs following an accident can run quite high, especially where the damage is severe. You may also need to factor in hospital costs if the accident resulted in injuries. The costs can add up, and if your automobile policy doesn't provide sufficient coverage, you will pay so much out-of-pocket.
2. You May Need a Commercial Auto Insurance Policy
As a business owner or entrepreneur who uses their car to run errands and serve other transportation needs for your business, the personal automobile policy will not cut it. For sufficient coverage, you will need commercial car insurance, as personal car insurance will not cover the business use of your vehicle.
3. An Auto Insurance Policy Follows the Car, not the Driver
As you let friends and family borrow your insured car, remember that the policy covers the vehicle, not the driver. Putting it differently, if your car is involved in an accident with someone else behind the wheel, you will be the one to file a claim under your automobile policy and not the driver under their own policy.
4. Understand Rental Coverage
A common misconception is that rental car coverage on your auto insurance policy means you have coverage and can claim if you get involved in an accident while driving a rental. The truth is that this isn't what it means. Rental car coverage means the insurer will cover the cost of renting a car you'll need to move around in while your vehicle is in the repair shop following an accident.
5. You Aren't Covered for Theft of Items From Your Car
Your auto insurance policy will not cover you for damage to or loss of phones, laptops, and other personal items while they are in your car. The policy will not pay to replace these stolen items.
Before getting an auto insurance policy, speak to an expert. Ask as many questions as possible and ensure you understand what you are signing up for before appending your signature. For more information on auto insurance, contact a professional near you.